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Speaker 1: Tonight, are you truly building a life or just an

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Speaker 1: investment portfolio or network statement. This is simply money presented

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Speaker 1: by all Worth Financial on Bob Sponseller along with Brian James.

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Speaker 1: There's a moment many people have and it never shows

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Speaker 1: up on any kind of a spreadsheet. You look at

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Speaker 1: your savings, your home, your investments, and you quietly wonder

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Speaker 1: to yourself, why doesn't all of this feel better? So

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Speaker 1: tonight's big question, are you building wealth you actually want

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Speaker 1: to live with or just something impressive on paper that

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Speaker 1: doesn't even match or resemble what you really want your

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Speaker 1: life to look like. Great topic tonight, let's get into it.

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Speaker 2: We're gonna kick this off with something we call the

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Speaker 2: scoreboard syndrome. So this happens very very frequently, and I

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Speaker 2: see it from meeting to meeting as we do our

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Speaker 2: big annual reviews with clients who are really just watching

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Speaker 2: that scoreboard, right, especially successful business owners, executives, people who

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Speaker 2: earn high incomes. That goalpost keeps moving. A couple of

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Speaker 2: years ago, that goal might have been two million, Now

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Speaker 2: you want three. If you hit five, it's going to

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Speaker 2: have to be ten because you know when we can

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Speaker 2: add a whole digit to our net worth. Then that

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Speaker 2: that can be really enticing to continue chasing. But here's

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Speaker 2: the real kicker. Most people can't even tell you why

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Speaker 2: how did they come to the conclusion of what they have?

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Speaker 2: And it's almost always well, it's it's within reaching distance anyway,

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Speaker 2: so therefore I might as well shoot for that next

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Speaker 2: that next million, so that my first number begins with

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Speaker 2: a new digit. But there's no real plan for what

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Speaker 2: it does. People just think they need more of it.

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Speaker 2: So the antidote to this is clarity. What do you

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Speaker 2: what do you want this for? Why are you going

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Speaker 2: to work? Are you really going to tackle on an

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Speaker 2: extra couple three years of your working career when you know,

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Speaker 2: at a time when your health may be declining, or

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Speaker 2: maybe you have to support your own parents or your

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Speaker 2: kids or whatever, and you've got enough money to retire,

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Speaker 2: is it really worth trying to, you know, keep plowing

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Speaker 2: forward toward that next that next goal post when it

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Speaker 2: really doesn't change anything about your situation. You may already

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Speaker 2: have the ability to provide the freedom and the travel

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Speaker 2: and all the security and even maybe the charitable things

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Speaker 2: that you want to do. You've got to define success

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Speaker 2: beyond that balance sheet. Otherwise, if you can't peel your

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Speaker 2: eyes off of it, you'll never get off the treadmill there.

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Speaker 2: And so you know, you want to make sure you

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Speaker 2: have a clearly defined goal that isn't just simply a number,

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Speaker 2: have a reason behind the number. Oh, you'll wind up

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Speaker 2: working too far. These are the people who come in

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Speaker 2: and we'll do the financial plan and they'll finally retire

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Speaker 2: and they'll say, darn, I should have done this three,

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Speaker 2: four or five years ago. And it's almost kind of

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Speaker 2: a sad revelation of people who missed out on time

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Speaker 2: that way.

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Speaker 1: No, you almost took the words out of my mouth,

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Speaker 1: you know with that last comment, because I don't know

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Speaker 1: where this comes from, you know, the whole scoreboard syndrome.

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Speaker 1: But I think when people are working or building a business,

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Speaker 1: or climbing the corporate ladder, there's a competitive you know,

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Speaker 1: atmosphere aspect to this, and I think people subconsciously are

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Speaker 1: looking at what are my peers doing? You know, how

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Speaker 1: do I look compared to them? And I work really hard.

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Speaker 1: I want my net worth to be at least as

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Speaker 1: much more than theirs. Is it's kind of it is,

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Speaker 1: it's that scoreboard thing. You know, keeping up with what

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Speaker 1: you where you think you should be at and meanwhile

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Speaker 1: life is passing you on by And Brian, without repeating

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Speaker 1: what everything you just said, I've seen this. You know,

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Speaker 1: people get into their sixties, they never had any fun

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Speaker 1: and you know, if they even retire, they get into

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Speaker 1: early retirement years and then an illness hits or illness

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Speaker 1: among family members and you never get to take those

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Speaker 1: vacations or trips or cruises or you know whatever you

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Speaker 1: really and a lot of people, a lot of times

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Speaker 1: they don't even think about what they really want to

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Speaker 1: do with that money. It can be very sad at times.

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Speaker 1: And and it's something I've seen you do this many times,

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Speaker 1: and you do a great job of it, just walking

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Speaker 1: through some of these key questions on hey, what is

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Speaker 1: all this really for? And it's a very important topic

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Speaker 1: to discuss. All right, let's move on to the next one.

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Speaker 3: Oh, go ahead.

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Speaker 2: Well, I was just gonna say, and I've said this before,

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Speaker 2: but but I'm talking about it more and more. I

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Speaker 2: think there's a big generational difference in how we were

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Speaker 2: trained to Today's crop of retirees or soon to be

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Speaker 2: retirees were not raised by people who had, generally speaking,

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Speaker 2: who had millions of dollars. They were mostly raised by

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Speaker 2: a generation that worked toward pensions. That means there was

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Speaker 2: never any discussion of how to handle a big pile

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Speaker 2: of money.

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Speaker 1: Well, and if there's any you know leftover, I'll say

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Speaker 1: family heritage or memories of the Great Depression. You know

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Speaker 1: that sticks with people, that does not go away, and

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Speaker 1: so people are some people are always walking around with

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Speaker 1: that mindset of, hey, this could all go away tomorrow,

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Speaker 1: or eighty percent of it could, and I'm not going

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Speaker 1: to let that happen, So they just keep building the pile.

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Speaker 3: All right, which leads us to our next question.

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Speaker 1: You know, an issue that we run into just being

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Speaker 1: afraid to spend our own money. And a lot of

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Speaker 1: people grow up and people that are able to accumulate

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Speaker 1: a nice netword, they do that in part because they're

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Speaker 1: very frugal and conservative with their money.

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Speaker 3: But you know, we're talking about extremes here where you know.

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Speaker 1: And we've seen this Brian people with a five six

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Speaker 1: seven million dollar portfolio come in and they're afraid to

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Speaker 1: buy a new mattress you know that costs maybe three

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Speaker 1: thousand dollars that might alleviate a whole lot of back

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Speaker 1: pain or taking.

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Speaker 2: A third of every day at least.

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Speaker 3: Yeah.

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Speaker 1: Yeah, And that that's where this thing can get a

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Speaker 1: little you know, ridiculous, you know, And sometimes we have

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Speaker 1: conversations like this sometimes where it's like, you know, and

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Speaker 1: I watched you do this last week with a client

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Speaker 1: where I thought it was beautifully laid out, where you said, hey,

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Speaker 1: you're thinking about taking a trip, or you're thinking about

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Speaker 1: remodeling your bathroom, and let's put a number on that,

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Speaker 1: say twenty thousand dollars, and you take a look at

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Speaker 1: their portfolio and say, well, you're going to be able

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Speaker 1: to redo your bathroom today with money that you didn't

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Speaker 1: even have at Halloween of last year.

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Speaker 3: Yeaheah.

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Speaker 2: It's a pretty common, fun one to talk about.

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Speaker 3: And it's beautiful. I love the way you put that.

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Speaker 1: And I watch people's eyes when when they actually when

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Speaker 1: it sinks in and it's like, you know what, You're right,

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Speaker 1: I'm being a little bit ridiculous about that, and that

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Speaker 1: can in a good way free up the reins a

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Speaker 1: little bit and get some of this stuff done that

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Speaker 1: they really want to do with this money that they

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Speaker 1: work so.

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Speaker 3: Hard to earn and accumulate.

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Speaker 2: Yeah, and then that brings up, Actually, that conversation you

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Speaker 2: just brought up, something else came up. I had a

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Speaker 2: similar one yesterday with a different client, and that brought

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Speaker 2: up our next point, which is that myth of perfect optimization.

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Speaker 2: So we're gonna speak to those perfectionists out there, for

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Speaker 2: those of you who are reading every tax rule, every

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Speaker 2: last investment article. You want to make the perfect decision

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Speaker 2: at every absolutely every turn. What that leads to often paralysis,

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Speaker 2: which causes stress and missed opportunity. So I just had

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Speaker 2: a conversation yesterday with some newer clients, newer to me anyway,

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Speaker 2: who are sitting on a pilot cash and they have

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Speaker 2: they got it in their heads that what they need

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Speaker 2: they're gonna be retiring in the next couple three four years,

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Speaker 2: so they should be building up cash. And that's not

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Speaker 2: the worst lifestyle, except there's already a huge pilot cash

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Speaker 2: shitting there because they've been doing this for a while. Meanwhile,

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Speaker 2: they're ignoring a some debt that's sitting out there, that

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Speaker 2: not debilitating debt, but just enough enough that it's costing

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Speaker 2: them something. You know, they're they're paying six seven percent

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Speaker 2: on a home equity line of credit and there's something

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Speaker 2: else out there for a vehicle or something like that. Meanwhile,

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Speaker 2: they're getting three or four percent on this giant pile

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Speaker 2: of cash that's sitting there, and it just doesn't make

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Speaker 2: any mathematical sense for this to to to you know,

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Speaker 2: to persist this way. And so in this case when

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Speaker 2: I run, when I run across stuff like this, I

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Speaker 2: tell people, look at your net worth. If you took

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Speaker 2: money right now, you're behaving in an inefficient manner. You

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Speaker 2: are protecting a resource that is paying you less than

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Speaker 2: an outflow is costing you because the interest is about

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Speaker 2: on the debt is twice as much as the cash

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Speaker 2: you've got coming in. So take a look at your

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Speaker 2: net worth. If you take, if you carve off a

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Speaker 2: chunk of that cash, throw it into the hole that

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Speaker 2: is the debt. Your net worth hasn't changed, but now

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Speaker 2: your cash flow has because you're not making more payments.

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Speaker 2: You're not you don't have a hole in the bucket

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Speaker 2: or representing the interest on that debt anymore. And at

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Speaker 2: some point you're gonna want this debt gone anyway, because

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Speaker 2: you are going to retire in the next handful of years.

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Speaker 2: So just just step back, look at the entire picture.

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Speaker 2: Don't live that. This was a case that where they

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Speaker 2: were looking strictly at that we got to have a

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Speaker 2: bigger pilot cash cash cash cash, gotta have more. They

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Speaker 2: never defined what more is. They just needed more. It

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Speaker 2: was an open ended commitment that they made to themselves

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Speaker 2: and probably lost a couple of years worth of inefficient

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Speaker 2: you know, interest to arbitration.

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Speaker 3: They were on the wrong side of it.

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Speaker 1: So but curious, Brian, in that case, the case you

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Speaker 1: just talked about, the reason, the why behind the decision

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Speaker 1: that they had been making before they came in to

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Speaker 1: talk to you, was just the need to see that

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Speaker 1: big pile of cash.

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Speaker 3: That was it. Yeah, that was it. And that's not

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Speaker 3: a bad.

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Speaker 1: This hole in the bucket of a you know, twenty

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Speaker 1: two percent interest rate on a credit card.

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Speaker 2: Yeah, and and what that?

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Speaker 3: What that?

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Speaker 2: What that caused them to think is we just have

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Speaker 2: to have so much cash, you know that that we

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Speaker 2: can't possibly live any other way. It caused them to

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Speaker 2: bake in those credit card payments and those home equity

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Speaker 2: line payments into their living expenses, which is completely unnecessary.

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Speaker 2: And that what that causes us to do. Assume it's

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Speaker 2: gonna be there for thirty years. It's not write the check,

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Speaker 2: carve it out, blow it up, make it go away.

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Speaker 2: And now your living expenses have come down. And then

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Speaker 2: in these final three years, you're gonna have free cash

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Speaker 2: flow with which to do whatever you want right before

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Speaker 2: you retire. And that could mean, yeah, you want to

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Speaker 2: build up more cash, build up more cash, but have

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Speaker 2: a goal. No, not just if we're going to build

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Speaker 2: up an enormous pile of cash. Well, at some point

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Speaker 2: we're gonna get to a point where we realize, you know,

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Speaker 2: we really could have invested some of this if it's

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Speaker 2: all gonna sit here anyway, you know, or maybe taking

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Speaker 2: that vacation or whatever the other things are. But don't

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Speaker 2: get caught in the staring at one tree and ignoring

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Speaker 2: the rest of the forest.

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Speaker 3: Now, great advice.

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Speaker 1: Ay. Another one we run into occasionally, Brian, and it's

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Speaker 1: this question, are you living your definition of success or

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Speaker 1: you may be living out someone else's narrative of what

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Speaker 1: success should look like? And this one's personal. Sometimes you

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Speaker 1: chase a lifestyle or a financial goal not because you

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Speaker 1: truly want it, but it's because it's what your peer

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Speaker 1: group's doing, or your parents did, or what someone told

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Speaker 1: you you should do, or social media tells you you

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Speaker 1: know what success should look like. And and that can

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Speaker 1: get into that lifestyle creep stuff, big house, nice cars,

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Speaker 1: second home, high end everything.

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Speaker 3: But here's the twist.

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Speaker 1: None of that stuff or a lot of that stuff

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Speaker 1: might not actually make you happier fulfilled. It just adds

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Speaker 1: more stress and management to your life. Where you know,

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Speaker 1: sometimes when we can talk to people about this, they say,

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Speaker 1: man if I didn't have this, this, this, or this

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Speaker 1: to pay for or think about or manage.

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Speaker 3: I would be happier. I would have less stress in

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Speaker 3: my life.

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Speaker 1: So yeah, it's it's it's defining your own definition of success.

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Speaker 2: Yeah, and here's a story I think that that kind

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Speaker 2: of defines this. We run across every now and then,

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Speaker 2: not too often, but every now and then, a run

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Speaker 2: across somebody who maybe they're in their their their mid

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Speaker 2: to late fifties, and they go buy a house in

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Speaker 2: a very very nice neighborhood that's got four bedrooms. Uh,

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Speaker 2: and there their last kids are now leaving the nest.

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Speaker 2: And I always wonder why, what what causes people to

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Speaker 2: do this? And it has occurred to me, that's what

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Speaker 2: they wanted for the prior thirty years. We want the

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Speaker 2: bigger house because we've got the kids and all that,

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Speaker 2: and then we kind of forget that that the need

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Speaker 2: is not going to be there anymore. But people will

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Speaker 2: still sometimes pull the trigger and buy that giant house

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Speaker 2: because that's what's baked into their minds as their ultimate goal.

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Speaker 1: It kind of like as a lifestyle achievement awards. Exactly right, there's.

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Speaker 3: It.

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Speaker 2: Finally had a five bedroom house on a full acre,

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Speaker 2: in a home, in a home around the neighborhood for

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Speaker 2: once in my life. But and I think people tend

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Speaker 2: to justify this. They'll know, yeah, the kids are moving out,

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Speaker 2: but the kids are going to have their own kids,

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Speaker 2: and we want everybody to come back and we'll have

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Speaker 2: a bedroom for everybody. Nobody does this. Nobody comes back

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Speaker 2: and spends a month at Christmas, you know, and really

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Speaker 2: needs that space. If it happens, it's not for a

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Speaker 2: very long period of time, because the kids grow up,

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Speaker 2: they get into sports, they do all these other things,

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Speaker 2: and then those trips back to see mom and dad

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Speaker 2: simply don't happen. Save that money, put them up in

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Speaker 2: a nice hotel. If that's if you feel obligated to

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Speaker 2: do that. But but don't tie yourself to a thirty

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Speaker 2: year mortgage in a five bedroom house where three bedrooms

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Speaker 2: are gonna do nothing except for store your dust.

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Speaker 3: Yeah, and you got to clean that dust too, exactly right.

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Speaker 2: Hell, you don't really have use leave dorshat and it

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Speaker 2: goes away.

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Speaker 3: It's amazing.

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Speaker 1: All right, there's another option. All right, here's the all

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Speaker 1: Worth advice. Money isn't the goal a meaningful life?

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Speaker 3: Is the money? Just funds it? All right?

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Speaker 1: The famous eighties slogan just say no is back.

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Speaker 3: This time We're not talking about drugs.

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Speaker 1: It's about your money and we'll explain what the heck

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Speaker 1: we're talking about next. You're listening to Simply Money presented

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Speaker 1: by all Worth Financial on fifty five KRC, the talk station.

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Speaker 1: You're listening to Simply Money presented by Allworth Financial. I'm

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Speaker 1: Bob Sponseller along with Brian James. Brian, what was that

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Speaker 1: noise that's scaring the Jesus.

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Speaker 3: Out of me? That drill?

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Speaker 1: Am I about to get my am, I about to

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Speaker 1: get cavities repaired on my teeth or something. I'm you're

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Speaker 1: gonna have to bail me out here. I'm petrified anyway.

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Speaker 1: From Madeira to Mason. You've got questions, We've got answers.

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Speaker 1: Don't miss tonight's Ask the Advisor segment coming up at

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Speaker 1: six forty three. A new financial wellness survey from into

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Speaker 1: It shows just how focused people are on their finances

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Speaker 1: right now. Nearly all Americans say they plan to make

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Speaker 1: changes to how they manage money in twenty twenty six. Brian,

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Speaker 1: I feel like we get this every year, and more

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Speaker 1: than half admit they're feeling more financial stress, with many

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Speaker 1: saying they regret pass spending decisions and they just want

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Speaker 1: to do better this year. They want to do things

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Speaker 1: differently moving forward. Let's get into this survey, Brian.

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Speaker 2: Yeah, so this this has got to led people across

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Speaker 2: the country to jump on this No by twenty twenty

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Speaker 2: six trend. This is a viral challenge where we're skipping

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Speaker 2: non essential spending for the year to boost savings and

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Speaker 2: kind of rethink your relationship with money.

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Speaker 3: I don't hate this.

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Speaker 2: You know, normally these viral challenges and this stuff just

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Speaker 2: annoys me. But this anything that causes people to stop

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Speaker 2: and think about whether they actually need something, I think

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Speaker 2: is a good thing.

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Speaker 3: Frankly, and what.

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Speaker 2: I'm when I'm when, I'm starting to see more and more,

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Speaker 2: you know, we will. We've all learned how over the

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Speaker 2: past couple of decades to sell stuff on eBay and

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Speaker 2: on Facebook, Marketplace and all that kind of thing. But

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Speaker 2: even though even dealing with the wackos on those sources

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Speaker 2: has become so burdened so it's not even worth it.

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Speaker 2: So I'm seeing more and more these websites popping up

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Speaker 2: based on neighborhoods where they're just posting stuff for free.

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Speaker 2: And I think that this that goes along with this

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Speaker 2: no buy twenty twenty six trend where people are realizing

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Speaker 2: somebody's got some crap out there that they don't need,

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Speaker 2: but maybe I actually do, and perhaps I don't have

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Speaker 2: to give my money to a big box retail store

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Speaker 2: and I can find it elsewhere. But this all comes

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Speaker 2: with people setting some ground rules for themselves, right, So

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Speaker 2: we're going to make sure we cover the essentials, housing, utilities, groceries,

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Speaker 2: all that getting around, but everything else that's more discretionary,

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Speaker 2: such as clothes, eating out, entertainments, splurges on beauty products,

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Speaker 2: or maybe the you know, the golfing five times a week.

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Speaker 2: That's kind of thing that's all off the table for

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Speaker 2: these folks. So the challenge here that you know, that's

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Speaker 2: that's fairly obvious. You're just breaking out your fixed versus

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Speaker 2: your discretionary costs. But the challenge is coming from the duration.

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Speaker 2: How long can you make yourself not do these things?

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Speaker 2: And then more importantly, what are you going to do

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Speaker 2: with those savings? So that's what this viral challenge is

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Speaker 2: all about. Carve out some period of time where you're

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Speaker 2: going to reduce, if not eliminate your discretionary spending in

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Speaker 2: favor of shoving that money in some other direction make

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Speaker 2: maybe that's paying off debt, or maybe that's setting it

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Speaker 2: aside for you know, a down payment on a home,

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Speaker 2: helping your kids, something like that. But this is trending

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Speaker 2: out there where there's lots of people on TikTok, Instagram, Reddit, YouTube,

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Speaker 2: where users are discussing the different things that they've eliminated,

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Speaker 2: how they've found ways to not miss those things or

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Speaker 2: find them more cheaply. And none of this is a

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Speaker 2: bad this is this is a viral thing that I'm

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Speaker 2: actually in supportive. More people thought this way, I think

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Speaker 2: we'd be in a much better spot as.

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Speaker 3: A nation, Bob, all right, I get Brian.

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Speaker 1: Would you just say this is kind of like the

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Speaker 1: gen Z version of getting out a credit card debt?

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Speaker 3: Is that what we're talking about?

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Speaker 1: I like it too, anything that helps you kind of realize, Hey,

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Speaker 1: here's the stuff I'm wasting my money on, and whether

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Speaker 1: it's for a couple weeks or a month or whatever,

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Speaker 1: I'm just gonna change course, develop a new habits and

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Speaker 1: maybe that short term habit can develop into a longer

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Speaker 1: term habit.

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Speaker 3: Is that what we're going here?

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Speaker 2: Crowdsourcing and intelligent financial ideas?

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Speaker 3: Right?

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Speaker 2: If I'm going to eliminate things, how did other people

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Speaker 2: do this? How did they fill the gap of whatever

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Speaker 2: it is that I've eliminated? Or maybe there's maybe even

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Speaker 2: on my fixed expenses? Are there better ways I can

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Speaker 2: deal with my fixed expenses? Other people have found ways?

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Speaker 2: The Internet is a great place to go look for

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Speaker 2: those types of ideas, and that's what's happening here.

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Speaker 3: And I'm a huge fan of it. All right, I agree?

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Speaker 3: All right?

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Speaker 1: Several months ago we warned you that if you don't

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Speaker 1: fly first class, you could be subjected to insane changes to.

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Speaker 3: The way you travel.

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Speaker 1: I think a lot of us have already experienced some

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Speaker 1: of this, and we told you Canadian airline WestJet, was

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Speaker 1: forcing passengers to pay extra for seats that simply recline.

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Speaker 3: Brian.

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Speaker 1: I don't know about you, but you know on the

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Speaker 1: flights that do have quote unquote reclining seats, those seats

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Speaker 1: will recline maybe two to three inches anyway, right.

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Speaker 2: I mean you get yelled at because it's got to

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Speaker 2: be updue when we're taking and never understood the physics behind.

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Speaker 2: If I lean back two inches, I'm somehow more exposed

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Speaker 2: than if I'm sitting at a ninety degree angle. That

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Speaker 2: has never made sense to me. But I don't even

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Speaker 2: bother reclining anymore, so I would definitely not be paying

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Speaker 2: west Jet.

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Speaker 1: It's all how they It's all about control, Brian. They

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Speaker 1: need to control us anyway. The airline has figured out, hey,

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Speaker 1: this was probably a mistake. They're going to reverse the

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Speaker 1: decision to reconfigure planes with tighter seats after videos went

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Speaker 1: viral showing frustrated travelers knees pressed against the seat in

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Speaker 1: front of them due to cramp spaces. Brian, I think

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Speaker 1: what they really did here is they found a way

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Speaker 1: to just add one more row of seats to an airplane,

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Speaker 1: call it six seats. You know, I don't know. I

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Speaker 1: do the quick math that three hundred bucks a seat.

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Speaker 1: That's nine eighteen hundred dollars for a flight. I cramm

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Speaker 1: in six more people on here and then really aggravating

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Speaker 1: the other two hundred sounds like a wonderful business decision

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Speaker 1: to me.

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Speaker 4: You know.

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Speaker 2: The funny thing to me is people sat around a

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Speaker 2: boardroom table and looked at a PowerPoint that said, hey,

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Speaker 2: let's jam everybody's knees in the back of the seat

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Speaker 2: in front of him. And then all the heads around

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Speaker 2: the table nodded because there was a spreadsheet behind it

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Speaker 2: that said, here's how much more money will make and now.

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Speaker 2: And then they had a subsequent meeting where well, you know, hey,

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Speaker 2: people don't like that. Oh well, you know, of course

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Speaker 2: we should probably go Maybe that was just maybe we

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Speaker 2: should undo that as soon as possible.

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Speaker 1: Well, and the best thing is when you get the

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Speaker 1: new the press release of the change decision, and this

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Speaker 1: was a borderline comical.

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Speaker 3: The company said it.

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Speaker 1: Will reverse what it called the quote unquote dentified seating.

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Speaker 3: Again.

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Speaker 1: We're paying it sounds like a harld NPA's millions of

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Speaker 1: dollars to come up with new terms for saying, hey,

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Speaker 1: we tried to jam six more seats on an airplane

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Speaker 1: and it was a dumb decision.

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Speaker 2: I think they should be required to use densified seating

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Speaker 2: as their slogan from now on and incursive stylized type.

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Speaker 1: All right, let's actually give some financial advice out here.

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Speaker 1: Every Sunday. You will find our all Worth advice in

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Speaker 1: the Cincinnati Inquire. Here's a preview from JK and Marymont.

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Speaker 1: He said, I recently read an argument that you shouldn't

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Speaker 1: save in a roth ira because your tax bracket in

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Speaker 1: retirement will be lower, So paying taxes now to get

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Speaker 1: tax free money later doesn't make any sense.

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Speaker 3: Do you agree, Brian? I know this is a topic

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Speaker 3: you love the banter about. Give us your thoughts. Yeah.

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Speaker 2: My immediate reaction to that as my happiest clients who

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Speaker 2: are retired gave themselves two buckets of money. However they

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Speaker 2: got there right. I think it's a great idea. However,

439
00:19:37,400 --> 00:19:38,960
Speaker 2: you're gonna get there to have a pile of pre

440
00:19:39,040 --> 00:19:41,960
Speaker 2: tax money and a pile of tax free money, because remember,

441
00:19:42,000 --> 00:19:44,440
Speaker 2: some of this money is gonna sit there for another thirty,

442
00:19:44,480 --> 00:19:47,159
Speaker 2: maybe even forty years, until you've passed on and your

443
00:19:47,240 --> 00:19:47,960
Speaker 2: kids inherited.

444
00:19:48,119 --> 00:19:48,679
Speaker 3: They're gonna be.

445
00:19:48,720 --> 00:19:51,480
Speaker 2: Much happier inheriting a roth ira than they will uh

446
00:19:51,480 --> 00:19:53,359
Speaker 2: something they forgot They've got to pay taxes on, So

447
00:19:53,560 --> 00:19:55,919
Speaker 2: I don't get too hung up over exactly what taxes

448
00:19:55,920 --> 00:19:57,880
Speaker 2: are going to be now versus later. There's no black

449
00:19:57,880 --> 00:19:58,920
Speaker 2: and white answers.

450
00:19:58,600 --> 00:20:01,760
Speaker 1: To these all right, Should you be using AI to

451
00:20:01,920 --> 00:20:05,560
Speaker 1: help you buy stuff? Our cybersecurity expert is in next

452
00:20:05,600 --> 00:20:08,560
Speaker 1: to discuss that topic. You're listening to Simply Money presented

453
00:20:08,560 --> 00:20:12,160
Speaker 1: by all Worth Financial on fifty five KRZ the talk station.

454
00:20:17,680 --> 00:20:20,240
Speaker 1: You're listening to Simply Money presented by all Worth Financial

455
00:20:20,320 --> 00:20:24,120
Speaker 1: Lambop spond Seller along with Brian James, joined today by

456
00:20:24,280 --> 00:20:30,720
Speaker 1: our tech and AI and cybersecurity guru mister Dave Hatter. Dave,

457
00:20:30,800 --> 00:20:33,520
Speaker 1: I can't wait to get your thoughts on this topic.

458
00:20:33,560 --> 00:20:37,720
Speaker 1: We came across an article recently where these AI tools

459
00:20:37,760 --> 00:20:41,400
Speaker 1: now you can tell them. For example, go out and

460
00:20:41,640 --> 00:20:44,880
Speaker 1: find me the best pair of gym shoes for under

461
00:20:44,880 --> 00:20:48,400
Speaker 1: one hundred dollars. Find the best quality pair of gym shoes.

462
00:20:48,800 --> 00:20:51,480
Speaker 1: Find it, buy it, ship it, to us put it

463
00:20:51,520 --> 00:20:54,760
Speaker 1: on my visa card. Dave, I'll tell you right now,

464
00:20:54,760 --> 00:20:57,320
Speaker 1: there's no way in hell I'm gonna let some computer

465
00:20:57,440 --> 00:20:58,280
Speaker 1: do that for me.

466
00:20:59,359 --> 00:21:00,239
Speaker 3: What say you?

467
00:21:00,359 --> 00:21:03,080
Speaker 1: And what could possibly go wrong with this kind of

468
00:21:03,560 --> 00:21:06,359
Speaker 1: quote unquote new and exciting technology out there?

469
00:21:07,480 --> 00:21:09,840
Speaker 4: Well, guys, as always, thanks for having me on, and

470
00:21:09,960 --> 00:21:12,280
Speaker 4: I think I'm glad you guys came up with this

471
00:21:12,400 --> 00:21:15,080
Speaker 4: as a topic to discuss because it touches on a

472
00:21:15,080 --> 00:21:18,440
Speaker 4: couple of things. There's this whole sort of new ish

473
00:21:18,520 --> 00:21:22,760
Speaker 4: field and AI called agentic AI or ae AI, agentics.

474
00:21:22,800 --> 00:21:25,720
Speaker 4: You'll hear people say it both ways. And this goes

475
00:21:25,760 --> 00:21:29,280
Speaker 4: beyond things like chat ept or crock or other chatbot

476
00:21:29,440 --> 00:21:33,200
Speaker 4: type systems where you sit down and type in a prompt.

477
00:21:33,680 --> 00:21:37,080
Speaker 4: The idea of a gentic AI is it essentially can

478
00:21:37,200 --> 00:21:40,920
Speaker 4: act like a human being and take take action on tasks.

479
00:21:40,960 --> 00:21:45,600
Speaker 4: It has agency, right, hence the name agentic And this

480
00:21:45,680 --> 00:21:47,479
Speaker 4: is sort of all the rage and the biziness.

481
00:21:47,480 --> 00:21:49,200
Speaker 3: Now when you hear people talk.

482
00:21:49,040 --> 00:21:51,080
Speaker 4: About how AI is going to put people out of

483
00:21:51,119 --> 00:21:53,920
Speaker 4: work and so forth, and when they're not talking about

484
00:21:53,960 --> 00:21:57,280
Speaker 4: super intelligence and artificial general intelligence, they're generally talking about

485
00:21:57,320 --> 00:21:59,880
Speaker 4: agentic AI, that these things are going to be set

486
00:21:59,920 --> 00:22:02,600
Speaker 4: up and this ai'll talk to that AI and it'll

487
00:22:02,600 --> 00:22:04,720
Speaker 4: do all of this stuff and work, and we won't

488
00:22:04,760 --> 00:22:08,800
Speaker 4: need people anymore. Now, will we get there eventually? Maybe

489
00:22:08,880 --> 00:22:10,960
Speaker 4: I'm calling bs on it at the moment. And to

490
00:22:11,000 --> 00:22:15,359
Speaker 4: answer your question specifically, Bob, No, there is absolutely not

491
00:22:15,600 --> 00:22:18,439
Speaker 4: a chance in hell I would give any sort of

492
00:22:18,480 --> 00:22:23,120
Speaker 4: AI agent access to my bank accounts or any financial

493
00:22:23,280 --> 00:22:27,040
Speaker 4: system and then let it act on my behalf. And

494
00:22:27,080 --> 00:22:30,080
Speaker 4: I'll tell you why so, guys, I spent twenty five

495
00:22:30,160 --> 00:22:33,919
Speaker 4: years in this business before I sort of transitioned into cybersecurity.

496
00:22:33,920 --> 00:22:37,080
Speaker 4: As a software engineer. I wrote millions of lines of code,

497
00:22:37,119 --> 00:22:40,080
Speaker 4: built every kind of thing you could imagine. And how

498
00:22:40,119 --> 00:22:42,919
Speaker 4: many times do you think I created a bug in

499
00:22:42,960 --> 00:22:47,200
Speaker 4: software and there were unintended consequences? The answer is a lot.

500
00:22:47,240 --> 00:22:49,119
Speaker 4: I don't know how many. How many times do you

501
00:22:49,160 --> 00:22:51,720
Speaker 4: think I did that on purpose? Well, the answer is never.

502
00:22:52,119 --> 00:22:55,000
Speaker 4: But I'm a human being. I make mistakes. And you know,

503
00:22:55,040 --> 00:22:57,960
Speaker 4: one of the key problems with AI to date is

504
00:22:58,200 --> 00:23:01,160
Speaker 4: you have this idea of hallucinations or confabulations where they

505
00:23:01,200 --> 00:23:03,520
Speaker 4: just make things up. So the idea that I'm going

506
00:23:03,560 --> 00:23:06,320
Speaker 4: to trust some AI, that's a black box. I can't

507
00:23:06,359 --> 00:23:08,399
Speaker 4: know what it does or why it does it to

508
00:23:08,600 --> 00:23:11,240
Speaker 4: control my money and take actions on my behalf that

509
00:23:11,320 --> 00:23:14,720
Speaker 4: involve my finances as far as I'm concerned, completely insane,

510
00:23:14,760 --> 00:23:16,240
Speaker 4: and there is no chance I would do that.

511
00:23:16,560 --> 00:23:19,080
Speaker 1: Kind of like asking Brian how many times he's taking

512
00:23:19,080 --> 00:23:21,280
Speaker 1: the client's money and put it in the stock market

513
00:23:21,400 --> 00:23:23,919
Speaker 1: and implied that there's no way you could lose money,

514
00:23:24,560 --> 00:23:26,560
Speaker 1: and then the stock market goes down eight percent.

515
00:23:26,640 --> 00:23:28,280
Speaker 3: Is that kind of what you're talking about.

516
00:23:29,080 --> 00:23:31,240
Speaker 4: Well, I don't know if i'd put Brian on the

517
00:23:31,280 --> 00:23:33,120
Speaker 4: spot like that, but yeah, be right back.

518
00:23:33,160 --> 00:23:34,520
Speaker 2: I got to cancel a lot of calls here.

519
00:23:36,760 --> 00:23:38,879
Speaker 4: I'm not saying there may not come a time in

520
00:23:38,920 --> 00:23:42,600
Speaker 4: the future, I mean where I might trust something like this,

521
00:23:42,640 --> 00:23:45,600
Speaker 4: although I'm super skeptical and again, spent twenty five years

522
00:23:45,600 --> 00:23:49,560
Speaker 4: writing software right now, not AI software, but writing software,

523
00:23:49,560 --> 00:23:53,119
Speaker 4: and in many cases, despite extensive testing, there were still

524
00:23:53,240 --> 00:23:55,879
Speaker 4: things that didn't work quite right, just miss something over here,

525
00:23:56,000 --> 00:23:58,600
Speaker 4: or someone used the software in a way I did

526
00:23:58,600 --> 00:24:01,359
Speaker 4: not anticipate and thus didn't do what I expected and

527
00:24:01,400 --> 00:24:04,520
Speaker 4: something bad happened. So the idea that I'm going to

528
00:24:04,520 --> 00:24:06,520
Speaker 4: have a black box where I can't really know how

529
00:24:06,520 --> 00:24:10,359
Speaker 4: it works and it has known faults right, So from

530
00:24:10,359 --> 00:24:12,800
Speaker 4: this article it came from Marco Watch. I encourage people

531
00:24:12,800 --> 00:24:14,960
Speaker 4: they should go read this for themselves if they're thinking

532
00:24:15,000 --> 00:24:15,879
Speaker 4: this is a good idea.

533
00:24:16,240 --> 00:24:17,280
Speaker 3: They do a really good.

534
00:24:17,200 --> 00:24:19,600
Speaker 4: Job of touching on many of the problems I would

535
00:24:19,640 --> 00:24:21,000
Speaker 4: see with something like this. But I just want to

536
00:24:21,040 --> 00:24:23,840
Speaker 4: read this toda. The tendency for AI to makes seemingly

537
00:24:23,840 --> 00:24:26,639
Speaker 4: confident but potentially wrong assumptions is getting worse, and this

538
00:24:26,720 --> 00:24:29,960
Speaker 4: is the idea of hallucination or confabulation, that they just

539
00:24:30,080 --> 00:24:33,119
Speaker 4: make things up. Recent analysis by The New York Times

540
00:24:33,119 --> 00:24:36,000
Speaker 4: reveals a troubling paradox. The most advanced AI systems are

541
00:24:36,000 --> 00:24:39,240
Speaker 4: becoming more convincing, yet are still more prone to hallucination.

542
00:24:39,400 --> 00:24:44,399
Speaker 4: Open AI's newest quote reasoning models unquote invent facts fifty

543
00:24:44,520 --> 00:24:47,439
Speaker 4: one to seventy nine percent of the time, compared with

544
00:24:47,520 --> 00:24:50,280
Speaker 4: forty four percent for older version, while Google engineers report

545
00:24:50,560 --> 00:24:54,200
Speaker 4: the reducing hallucination is now the quote fundamental blocker unquote

546
00:24:54,200 --> 00:24:57,400
Speaker 4: to wider AI deployment. So when you know this going

547
00:24:57,480 --> 00:25:00,639
Speaker 4: into it, and you know that often it will not

548
00:25:00,680 --> 00:25:03,199
Speaker 4: only hallucinate, this is all well documented. Guys will not

549
00:25:03,200 --> 00:25:05,399
Speaker 4: only hallucinate, but then work hard to convince you what

550
00:25:05,440 --> 00:25:08,280
Speaker 4: it's telling you, which is patently false, is correct. As

551
00:25:08,320 --> 00:25:11,119
Speaker 4: a problem, not to mention the privacy issues of this,

552
00:25:11,640 --> 00:25:15,200
Speaker 4: the issues with these things being hacked, the idea that

553
00:25:15,880 --> 00:25:19,000
Speaker 4: if a hacker could somehow get into your account, whether

554
00:25:19,040 --> 00:25:21,359
Speaker 4: they hack the back end of the agentic AI or

555
00:25:21,400 --> 00:25:23,840
Speaker 4: they just take over your account, that suddenly you could

556
00:25:23,840 --> 00:25:26,520
Speaker 4: have an avalanche of spending. You know, are these things

557
00:25:26,560 --> 00:25:29,200
Speaker 4: really making the best decisions on your behalf or there

558
00:25:29,200 --> 00:25:31,480
Speaker 4: a bias in the models where they're actually picking more

559
00:25:31,480 --> 00:25:33,920
Speaker 4: expensive things rather than buying the thing that would be

560
00:25:33,960 --> 00:25:36,680
Speaker 4: the best fit for you. Hard to say, those are

561
00:25:36,720 --> 00:25:39,200
Speaker 4: all risks. And again, guys, I'm just telling you now.

562
00:25:39,440 --> 00:25:41,800
Speaker 4: Everyone that knows me knows I'm the ten foil hat guy.

563
00:25:42,200 --> 00:25:45,480
Speaker 4: I'm always the doom guy because I know how this

564
00:25:45,560 --> 00:25:47,840
Speaker 4: stuff works to a large extent, I've been doing this

565
00:25:47,880 --> 00:25:50,840
Speaker 4: for a long time. Again, at some point in the future,

566
00:25:51,359 --> 00:25:53,440
Speaker 4: would there become a time where I might trust something

567
00:25:53,480 --> 00:25:56,159
Speaker 4: like this, Maybe, But we are still barely in the

568
00:25:56,160 --> 00:26:00,240
Speaker 4: infancy of this, and there is absolutely zero chance it'll

569
00:26:00,280 --> 00:26:02,880
Speaker 4: let any sort of AI agent act on my behalf

570
00:26:02,920 --> 00:26:03,960
Speaker 4: with anything financed.

571
00:26:04,440 --> 00:26:06,040
Speaker 2: So first thing, I want to say, is I do

572
00:26:06,280 --> 00:26:09,480
Speaker 2: use AI, I use chat, GPT, we use copilots sometimes.

573
00:26:09,480 --> 00:26:12,720
Speaker 2: It really is a wonderful tool for like Google on steroids,

574
00:26:12,760 --> 00:26:14,679
Speaker 2: when trying to put a puzzle together for somebody, or

575
00:26:14,680 --> 00:26:16,840
Speaker 2: answer questions about how something works or whatever. It is

576
00:26:16,880 --> 00:26:20,560
Speaker 2: a fantastic tool for that. However, can you imagine choosing

577
00:26:20,600 --> 00:26:24,440
Speaker 2: a surgeon or some kind of medical advisor whose stated

578
00:26:24,520 --> 00:26:27,440
Speaker 2: goal in the short term is to reduce the hallucinations?

579
00:26:27,600 --> 00:26:29,639
Speaker 2: It really seems like not the greatest idea, But I

580
00:26:29,640 --> 00:26:32,160
Speaker 2: want to take this in a slightly different direction. So Dave,

581
00:26:32,200 --> 00:26:34,680
Speaker 2: you've expressed your concerns from the technological standpoint, and that

582
00:26:34,720 --> 00:26:35,680
Speaker 2: makes a heck of a lot of sense.

583
00:26:35,720 --> 00:26:37,280
Speaker 3: We appreciate you're on.

584
00:26:37,200 --> 00:26:39,560
Speaker 2: This side with us to help us understand that. Part

585
00:26:39,920 --> 00:26:43,600
Speaker 2: my brain goes to the regulatory stuff, so I am

586
00:26:43,640 --> 00:26:46,560
Speaker 2: not permitted to send out an email to all of

587
00:26:46,560 --> 00:26:49,760
Speaker 2: my clients without it being having it being reviewed by

588
00:26:49,840 --> 00:26:52,080
Speaker 2: you know a lot of compliance departments and legal people

589
00:26:52,080 --> 00:26:55,000
Speaker 2: who help us protect ourselves and our clients and so forth.

590
00:26:55,400 --> 00:26:57,440
Speaker 2: You know there are good processes in place for that.

591
00:26:57,720 --> 00:27:00,399
Speaker 2: I have to get I have take continuing education to

592
00:27:00,520 --> 00:27:02,720
Speaker 2: keep up on my certify Financial Planter degree and all

593
00:27:02,720 --> 00:27:04,800
Speaker 2: these other things. Some people are licensed, and there's lots

594
00:27:04,840 --> 00:27:08,879
Speaker 2: of requirements there who at some point one regulatory body

595
00:27:09,280 --> 00:27:11,080
Speaker 2: and there are many of them, the SEC or FINRA

596
00:27:11,160 --> 00:27:13,080
Speaker 2: or whoever, is going to have to say, hey, wait

597
00:27:13,119 --> 00:27:15,480
Speaker 2: a minute, these robots are providing advice and people are

598
00:27:15,560 --> 00:27:16,720
Speaker 2: apparently listening to it.

599
00:27:16,840 --> 00:27:17,560
Speaker 3: We probably got to.

600
00:27:17,560 --> 00:27:19,119
Speaker 2: Have eyeballs on that, and then they're going to look

601
00:27:19,160 --> 00:27:21,280
Speaker 2: under the hood to figure out what is the motivation.

602
00:27:21,359 --> 00:27:22,760
Speaker 2: So I'm looking at this part of this article that

603
00:27:22,800 --> 00:27:27,080
Speaker 2: refers to sponsored results, meaning what stops somebody from throwing

604
00:27:27,160 --> 00:27:30,600
Speaker 2: a language model out there that will gear somebody towards

605
00:27:30,600 --> 00:27:34,880
Speaker 2: certain products. That's illegal for a fiduciary advisor to do.

606
00:27:35,160 --> 00:27:37,679
Speaker 2: But what stops a computer? You know, the regulators are

607
00:27:37,720 --> 00:27:39,000
Speaker 2: going to have to step in on this. Have you

608
00:27:39,040 --> 00:27:41,320
Speaker 2: heard anything on the regulatory side of that kind.

609
00:27:41,200 --> 00:27:44,959
Speaker 4: Of thing, Not specifically, but I'll answer that at a second.

610
00:27:45,320 --> 00:27:47,520
Speaker 4: You brought up a really good point. You know, I

611
00:27:47,680 --> 00:27:50,760
Speaker 4: use this stuff myself. I prefer Rock in general, you know,

612
00:27:50,840 --> 00:27:54,400
Speaker 4: copilots built into the Microsoft platform, and I would tell

613
00:27:54,560 --> 00:27:58,280
Speaker 4: folks from a chatout perspective again, forget these automated agents.

614
00:27:58,560 --> 00:28:01,480
Speaker 4: You know, if you understand the risk of your data

615
00:28:01,520 --> 00:28:04,840
Speaker 4: being exposed through the model to someone else, of getting

616
00:28:05,160 --> 00:28:07,480
Speaker 4: you know, false answers and things like that. They can

617
00:28:07,600 --> 00:28:10,399
Speaker 4: be like rocket fuel for you from a productivity standpoint.

618
00:28:10,720 --> 00:28:12,960
Speaker 4: So I'm not suggesting to people there's no value in

619
00:28:13,000 --> 00:28:14,920
Speaker 4: this or they should avoid AI in general. In fact,

620
00:28:14,960 --> 00:28:17,840
Speaker 4: I encourage everyone check it out for themselves. You'll have

621
00:28:17,840 --> 00:28:20,320
Speaker 4: a better understanding of where this stuff is at. But

622
00:28:20,440 --> 00:28:23,520
Speaker 4: this agentic AI again, this black box thing that's going

623
00:28:23,600 --> 00:28:25,400
Speaker 4: to act on your behalf. And then to your point,

624
00:28:25,480 --> 00:28:28,440
Speaker 4: Brian about the fiduciary angle of this, yeah, I mean

625
00:28:28,680 --> 00:28:31,160
Speaker 4: this whole agentic thing is still new. I've not heard

626
00:28:31,200 --> 00:28:34,920
Speaker 4: any sort of rumblings about the fiduciary aspect and regulation

627
00:28:35,119 --> 00:28:37,760
Speaker 4: around the financial interface of this. I mean, for the

628
00:28:37,800 --> 00:28:38,480
Speaker 4: most part, all.

629
00:28:38,360 --> 00:28:40,040
Speaker 3: This stuff is still the wild wild West.

630
00:28:40,520 --> 00:28:43,560
Speaker 4: You know, we're kind of inter race with other adversarial

631
00:28:43,640 --> 00:28:45,760
Speaker 4: nations like China to try to be first on some

632
00:28:45,800 --> 00:28:48,200
Speaker 4: of this stuff so that it doesn't become a strategic

633
00:28:48,240 --> 00:28:52,080
Speaker 4: advantage and potentially a military advantage. But you know, there's

634
00:28:52,120 --> 00:28:54,280
Speaker 4: really almost no regulation around any of this. And I

635
00:28:54,320 --> 00:28:57,719
Speaker 4: think you make a really good point. The whole idea

636
00:28:57,840 --> 00:28:59,760
Speaker 4: in that article they call it sponsored results.

637
00:29:00,400 --> 00:29:00,600
Speaker 3: Yeah.

638
00:29:00,640 --> 00:29:02,560
Speaker 4: Again, these things are a black box. And even if

639
00:29:02,600 --> 00:29:06,080
Speaker 4: you didn't have algorithmic bias in the agent, there might

640
00:29:06,120 --> 00:29:09,120
Speaker 4: be bias in the training data or someone behind the scenes,

641
00:29:09,160 --> 00:29:11,880
Speaker 4: because it would be very difficult to figure out. I mean,

642
00:29:11,880 --> 00:29:13,720
Speaker 4: that's one of the risks they point out, and I

643
00:29:13,720 --> 00:29:15,760
Speaker 4: think a legitimate one and another reason why I would

644
00:29:15,760 --> 00:29:17,640
Speaker 4: never use anything like this in the near future.

645
00:29:17,720 --> 00:29:20,760
Speaker 1: Because always from our tech expert Dave Hatter, thanks as

646
00:29:20,800 --> 00:29:23,840
Speaker 1: always for joining us. You're listening to Simply Money presented

647
00:29:23,880 --> 00:29:27,560
Speaker 1: by all Worth Financial on fifty five KARC the talk station.

648
00:29:32,240 --> 00:29:34,880
Speaker 1: You're listening to Simply Money presented by all Worth Financial.

649
00:29:34,920 --> 00:29:37,920
Speaker 1: I Bob Sponseller along with Brian James. Do you have

650
00:29:37,960 --> 00:29:40,400
Speaker 1: a financial question you'd like for us to answer. There

651
00:29:40,480 --> 00:29:42,880
Speaker 1: is a big red button you can click while you're

652
00:29:42,920 --> 00:29:46,120
Speaker 1: listening to the show right on the iHeart app. Simply

653
00:29:46,160 --> 00:29:49,040
Speaker 1: record your question and it will come straight to us.

654
00:29:49,560 --> 00:29:49,920
Speaker 3: All right.

655
00:29:50,040 --> 00:29:53,640
Speaker 1: David in Columbia Tusculum leads us off Brian. He asks,

656
00:29:53,680 --> 00:29:57,840
Speaker 1: how do I avoid being pushed into higher Medicare premiums

657
00:29:58,440 --> 00:30:00,680
Speaker 1: because of my RMD to distributions.

658
00:30:01,200 --> 00:30:03,320
Speaker 2: So David apparently is run into that time of life

659
00:30:03,360 --> 00:30:05,760
Speaker 2: where the financial questions are no longer so simple. And

660
00:30:05,840 --> 00:30:08,360
Speaker 2: always tell my younger clients, hey, you know, when you're

661
00:30:08,400 --> 00:30:10,360
Speaker 2: twenty and thirty years old, you're just trying not to

662
00:30:10,400 --> 00:30:13,160
Speaker 2: make a mess. Be aggressive with your investments, don't panic

663
00:30:13,160 --> 00:30:14,720
Speaker 2: when the market wobbles, and don't make a mess of

664
00:30:14,760 --> 00:30:17,000
Speaker 2: your credit. Do that for thirty years and you'll be fine.

665
00:30:17,120 --> 00:30:19,240
Speaker 2: Then you run into questions like what David has, where

666
00:30:19,240 --> 00:30:22,520
Speaker 2: obviously there's enough money that's coming out where his rmds

667
00:30:22,600 --> 00:30:24,840
Speaker 2: might be pushing him into a situation where the Medicare

668
00:30:24,920 --> 00:30:26,840
Speaker 2: organization says, hey, you need to pay a little bit

669
00:30:26,840 --> 00:30:29,240
Speaker 2: more for care. So the way this works, there's something

670
00:30:29,240 --> 00:30:33,000
Speaker 2: out there called IRMA IRMAA and that covers that is

671
00:30:33,040 --> 00:30:36,520
Speaker 2: basically a calculation that looks at your Medicare premiums and

672
00:30:36,680 --> 00:30:39,200
Speaker 2: it will look for if you're married, income of two

673
00:30:39,240 --> 00:30:41,040
Speaker 2: hundred and six thousand dollars and half of that one

674
00:30:41,120 --> 00:30:41,960
Speaker 2: hundred and three thousand.

675
00:30:42,000 --> 00:30:42,560
Speaker 3: If you're single.

676
00:30:42,680 --> 00:30:46,760
Speaker 2: You go above that income wise, and your rmds, I'm sorry,

677
00:30:46,800 --> 00:30:48,800
Speaker 2: your Medicare premiums are going to start to rise a

678
00:30:48,840 --> 00:30:52,280
Speaker 2: little bit. So required minimum distributions are a whole other concept.

679
00:30:52,520 --> 00:30:54,560
Speaker 2: They this is what happens if you have a pre

680
00:30:54,640 --> 00:30:57,040
Speaker 2: tax IRA or four O one K, and then the

681
00:30:57,080 --> 00:30:59,280
Speaker 2: IRS eventually is going to force you to start taking

682
00:30:59,280 --> 00:31:01,600
Speaker 2: money out of that. And IRS doesn't care what you

683
00:31:01,680 --> 00:31:03,480
Speaker 2: do with it. They're simply saying you have to remove

684
00:31:03,480 --> 00:31:05,520
Speaker 2: it from the tax shelter, and then some percentage of

685
00:31:05,520 --> 00:31:07,320
Speaker 2: that total amount is going to be taxed. It's in

686
00:31:07,360 --> 00:31:10,640
Speaker 2: the ballpark of four percent maybe of your prior year

687
00:31:10,760 --> 00:31:12,600
Speaker 2: end IRA. So in other words, you've got a million

688
00:31:12,600 --> 00:31:15,160
Speaker 2: dollar IRA, then yes, you have forty thousand dollars worth

689
00:31:15,200 --> 00:31:19,600
Speaker 2: of taxable income that can push those IRMA Medicare premiums up.

690
00:31:19,640 --> 00:31:21,320
Speaker 2: What am I gonna do about it? This is where

691
00:31:21,400 --> 00:31:24,560
Speaker 2: roth conversions in your sixties, right that window between when

692
00:31:24,560 --> 00:31:27,640
Speaker 2: you have really low income. I've retired, maybe I'm living

693
00:31:27,640 --> 00:31:30,440
Speaker 2: off savings best case scenario, or maybe it's only social Security.

694
00:31:30,440 --> 00:31:32,560
Speaker 2: Therefore I'm in the lowest bracket I've seen in forever.

695
00:31:33,120 --> 00:31:35,400
Speaker 2: Do some roth conversions use up some of those low brackets,

696
00:31:35,440 --> 00:31:37,760
Speaker 2: You'll lower your future rm ds. You can also do

697
00:31:37,840 --> 00:31:42,040
Speaker 2: qualified charitable distributions. This is your RMD, your requirement of

698
00:31:42,080 --> 00:31:44,320
Speaker 2: distribution going straight to a charity, but it keeps it

699
00:31:44,360 --> 00:31:46,320
Speaker 2: out of your modified adjusted gross income to help you

700
00:31:46,400 --> 00:31:48,640
Speaker 2: avoid that and then figure out how to do your

701
00:31:48,680 --> 00:31:52,280
Speaker 2: withdrawals tax efficiently, coordinate your taxable and your WROTH accounts

702
00:31:52,320 --> 00:31:54,960
Speaker 2: first to smooth over that income. All right, long unded

703
00:31:55,000 --> 00:31:56,920
Speaker 2: answer there, but let's move on to Elaine and Madeira.

704
00:31:56,960 --> 00:32:01,320
Speaker 1: Bob's I feel like David just got a full blown

705
00:32:01,360 --> 00:32:05,320
Speaker 1: retirement seminar in about three minutes. But does that all right?

706
00:32:06,360 --> 00:32:06,720
Speaker 3: All right?

707
00:32:06,720 --> 00:32:09,440
Speaker 1: Elaine and Madeira, and I'll take this one. Was She says,

708
00:32:09,480 --> 00:32:13,400
Speaker 1: with so many options right now, ETFs, buffer, ETFs, direct investing,

709
00:32:13,960 --> 00:32:16,560
Speaker 1: how do I or direct indexing? How do I pick

710
00:32:16,600 --> 00:32:22,440
Speaker 1: the best core investment strategy for a three million dollar portfolio? Well,

711
00:32:22,480 --> 00:32:24,000
Speaker 1: you bring up a lot of good stuff.

712
00:32:23,720 --> 00:32:24,480
Speaker 3: Here, Elaine.

713
00:32:24,560 --> 00:32:29,080
Speaker 1: You know involving taxes, you know with direct indexing, BUFFERDTS

714
00:32:29,120 --> 00:32:33,200
Speaker 1: has to do with managing investment volatility. We need to

715
00:32:33,240 --> 00:32:36,120
Speaker 1: know how much of that money is in qualified accounts

716
00:32:36,160 --> 00:32:39,239
Speaker 1: iras four oh one ks versus taxable accounts. There's a

717
00:32:39,280 --> 00:32:41,719
Speaker 1: lot to balance here, and I don't want to make

718
00:32:41,760 --> 00:32:45,040
Speaker 1: this sound overwhelming, but you know you need to sit

719
00:32:45,120 --> 00:32:48,960
Speaker 1: down and develop your risk tolerance, your cash flow needs,

720
00:32:49,400 --> 00:32:52,680
Speaker 1: and then have that result in an investment strategy that

721
00:32:52,800 --> 00:32:58,640
Speaker 1: dovetails with a good, solid, tax efficient income distribution strategy.

722
00:32:59,000 --> 00:33:02,200
Speaker 1: And that's where sitting down with a good fiduciary advisor

723
00:33:02,320 --> 00:33:05,080
Speaker 1: that could walk you through all that might be of

724
00:33:05,160 --> 00:33:08,280
Speaker 1: help here. That'd be my recommendation. If this is something

725
00:33:08,320 --> 00:33:11,520
Speaker 1: you don't feel like you want to take on yourself,

726
00:33:11,760 --> 00:33:15,000
Speaker 1: get get some help. Partner with a good fiduciary advisor.

727
00:33:15,680 --> 00:33:20,120
Speaker 1: All right, Tom and Anderson township asks. Are actively managed

728
00:33:20,160 --> 00:33:23,320
Speaker 1: funds ever worth it if I already own the indexes

729
00:33:23,800 --> 00:33:25,520
Speaker 1: and I'm in a higher tax bracket.

730
00:33:26,000 --> 00:33:28,640
Speaker 2: Yeah, So this is a pretty common question. You know

731
00:33:28,720 --> 00:33:31,440
Speaker 2: what we're talking about active versus passive. Active means there's

732
00:33:31,440 --> 00:33:34,000
Speaker 2: a person or a group of persons sitting on top

733
00:33:34,080 --> 00:33:36,280
Speaker 2: of a pile of money saying we like this investment,

734
00:33:36,280 --> 00:33:38,240
Speaker 2: we don't like this investment, We're gonna buy this and

735
00:33:38,240 --> 00:33:43,040
Speaker 2: sell that, versus a passive investments which simply follows an index.

736
00:33:43,080 --> 00:33:45,040
Speaker 2: So an index such as the S and P five hundred,

737
00:33:45,080 --> 00:33:47,360
Speaker 2: which is nothing more than the five hundred largest companies

738
00:33:47,360 --> 00:33:49,400
Speaker 2: in the United States. So I would say, yeah, there

739
00:33:49,480 --> 00:33:51,960
Speaker 2: are times where active management is worth it, but I

740
00:33:52,000 --> 00:33:54,880
Speaker 2: don't view that in terms of beating the market quote unquote,

741
00:33:55,080 --> 00:33:58,440
Speaker 2: where where we have at times employed active management is

742
00:33:58,480 --> 00:34:00,560
Speaker 2: in when we have kind of unique sit situations and

743
00:34:00,600 --> 00:34:03,560
Speaker 2: we want human brains versus a blind indexes. So, for example,

744
00:34:03,840 --> 00:34:06,719
Speaker 2: we've have a generation and a half of people who

745
00:34:06,800 --> 00:34:08,960
Speaker 2: have really never seen interest rates doing what they're doing

746
00:34:09,040 --> 00:34:09,319
Speaker 2: over the.

747
00:34:09,320 --> 00:34:10,120
Speaker 3: Past three years.

748
00:34:10,320 --> 00:34:12,320
Speaker 2: Prior to that, interest rates went down and sat on

749
00:34:12,360 --> 00:34:14,319
Speaker 2: the floor forever. Now, all of a sudden, we're in

750
00:34:14,320 --> 00:34:17,440
Speaker 2: a different situation. We've got fiscal policy and monetary policy

751
00:34:17,520 --> 00:34:19,399
Speaker 2: moving in directions we haven't ever had before, a lot

752
00:34:19,400 --> 00:34:22,880
Speaker 2: of politicization of things. I want active management sitting on

753
00:34:22,920 --> 00:34:26,120
Speaker 2: top of some of these bonds to basically protect from

754
00:34:26,280 --> 00:34:28,400
Speaker 2: some risk as opposed to just sitting on an index.

755
00:34:28,640 --> 00:34:31,000
Speaker 2: That's how I currently feel. I'm happy with that, but

756
00:34:31,440 --> 00:34:33,440
Speaker 2: I think that's a place, you know, again, for very

757
00:34:33,520 --> 00:34:36,200
Speaker 2: unique situations, for a corner of the portfolio, I don't

758
00:34:36,239 --> 00:34:37,560
Speaker 2: need a human brain to tell me it's a good

759
00:34:37,560 --> 00:34:39,240
Speaker 2: idea to own the S and P. Five hundred though.

760
00:34:39,360 --> 00:34:40,719
Speaker 2: All right, we've got time for one more. So we're

761
00:34:40,719 --> 00:34:43,080
Speaker 2: gonna throw it to Ken and Mason. Ken's wondering how

762
00:34:43,120 --> 00:34:44,960
Speaker 2: far out he needs to think when it comes to

763
00:34:45,040 --> 00:34:47,480
Speaker 2: tax Planning's tax planning just a this year thing, or

764
00:34:47,560 --> 00:34:48,840
Speaker 2: do I need to think out into the future.

765
00:34:48,840 --> 00:34:52,160
Speaker 1: Bob, Yeah, I think you need to go out you know,

766
00:34:52,320 --> 00:34:55,600
Speaker 1: one five, ten years, even twenty or thirty years. And

767
00:34:55,640 --> 00:34:57,799
Speaker 1: here's what I mean by that. We're talking about what

768
00:34:58,000 --> 00:35:02,080
Speaker 1: is that RMD situation? Little look like going out longer term.

769
00:35:02,120 --> 00:35:05,160
Speaker 1: And this is where the more proactive you can get

770
00:35:05,560 --> 00:35:10,120
Speaker 1: with your actual financial and cash flow plan and tax planning,

771
00:35:10,160 --> 00:35:13,439
Speaker 1: the better off you're gonna be. So definitely sit down

772
00:35:13,520 --> 00:35:16,640
Speaker 1: and map out some strategies and model it out. If

773
00:35:16,640 --> 00:35:19,680
Speaker 1: I do this, how does it look one year, five years,

774
00:35:19,760 --> 00:35:23,239
Speaker 1: ten years, fifteen years from now? And that typically results

775
00:35:23,239 --> 00:35:27,360
Speaker 1: in some pretty good planning. All right, are folks choosing

776
00:35:27,600 --> 00:35:31,240
Speaker 1: love over money or money over love? For a growing

777
00:35:31,320 --> 00:35:35,239
Speaker 1: number of Americans, they're trying to juggle both and it

778
00:35:35,280 --> 00:35:36,360
Speaker 1: gets very complicated.

779
00:35:36,440 --> 00:35:37,800
Speaker 3: We'll explain what we mean next.

780
00:35:37,840 --> 00:35:40,480
Speaker 1: You're listening to Simply Money presented by all Worth Financial

781
00:35:40,680 --> 00:35:49,520
Speaker 1: fifty five KRZ the talk station. You're listening to Simply

782
00:35:49,560 --> 00:35:52,200
Speaker 1: Money presented by all Worth Financial on Bob Spondseller along

783
00:35:52,200 --> 00:35:56,040
Speaker 1: with Brian James. There are a zillion studies out there

784
00:35:56,080 --> 00:35:59,760
Speaker 1: that show that money is a major stressor in relationships.

785
00:36:00,040 --> 00:36:04,279
Speaker 1: See it every day but for some Brian money ends

786
00:36:04,360 --> 00:36:09,120
Speaker 1: up being the glue that holds marriages or relationships together.

787
00:36:09,600 --> 00:36:13,120
Speaker 1: There's a new survey out, you know, from Chime and

788
00:36:13,239 --> 00:36:17,319
Speaker 1: Talker research. You being this sharp gen X gentleman that

789
00:36:17,960 --> 00:36:21,680
Speaker 1: you probably live on chime every day, talk about this study.

790
00:36:21,840 --> 00:36:23,560
Speaker 3: Tell us what we're talking about here.

791
00:36:24,000 --> 00:36:26,520
Speaker 2: I don't know what chime is, but thank you for

792
00:36:26,560 --> 00:36:30,800
Speaker 2: the stereotype there, Bob, My goodness anyway, So yeah, new

793
00:36:31,080 --> 00:36:34,719
Speaker 2: survey here, This basically is one in five Americans say

794
00:36:34,719 --> 00:36:38,000
Speaker 2: they're staying in a romantic relationship because of financial reasons.

795
00:36:38,040 --> 00:36:41,160
Speaker 2: And there's always loaded guns to this, right. This is

796
00:36:41,239 --> 00:36:42,879
Speaker 2: never as simple as it sounds. So this is we're

797
00:36:42,880 --> 00:36:45,560
Speaker 2: talking about shared bank accounts, a mortgage with two names

798
00:36:45,600 --> 00:36:48,240
Speaker 2: on it. You know, the cost of splitting up generally

799
00:36:48,360 --> 00:36:50,480
Speaker 2: is keeping people together, whether the romance is there or not.

800
00:36:50,480 --> 00:36:53,239
Speaker 2: Now I'm dealing with a situation in this case right now,

801
00:36:53,440 --> 00:36:57,200
Speaker 2: and the sometimes it's the headline is it's the finances

802
00:36:57,320 --> 00:36:59,960
Speaker 2: keeping together. But I'm gonna get serious here for a second.

803
00:37:00,160 --> 00:37:01,560
Speaker 3: Really the kids, because you know.

804
00:37:01,560 --> 00:37:03,800
Speaker 2: If you're you're trying to make it in today's world,

805
00:37:03,880 --> 00:37:06,840
Speaker 2: life is expensive, and the kids cost what they cost,

806
00:37:07,000 --> 00:37:08,640
Speaker 2: and all of a sudden, now we have to split

807
00:37:08,719 --> 00:37:10,640
Speaker 2: up the same amount of income. Because people don't change

808
00:37:10,680 --> 00:37:13,160
Speaker 2: their jobs over this usually because you kind of can't.

809
00:37:13,160 --> 00:37:14,279
Speaker 2: But now all of a sudden that you have to

810
00:37:14,320 --> 00:37:16,120
Speaker 2: figure out how these two incomes are going to support

811
00:37:16,120 --> 00:37:18,200
Speaker 2: two households in which the same group of kids is

812
00:37:18,200 --> 00:37:20,440
Speaker 2: going to live. And it is extremely hard. This is

813
00:37:20,480 --> 00:37:23,480
Speaker 2: not just struggling young adults. This happens at every stage,

814
00:37:23,560 --> 00:37:26,360
Speaker 2: right people with the relationship falls apart. Toward the end,

815
00:37:26,440 --> 00:37:29,200
Speaker 2: it can get even scarier because then there's real assets,

816
00:37:29,280 --> 00:37:32,560
Speaker 2: very complex portfolios out there, So there's a lot of

817
00:37:32,600 --> 00:37:35,200
Speaker 2: things that are that can come out, real estate investments,

818
00:37:35,320 --> 00:37:37,400
Speaker 2: estate plans, all of this stuff. It all has to

819
00:37:37,480 --> 00:37:41,360
Speaker 2: kind of work together over time. Money can hide these problems,

820
00:37:41,400 --> 00:37:43,640
Speaker 2: either if there are too much if there's you know,

821
00:37:43,760 --> 00:37:45,560
Speaker 2: I don't know if there's any such things too much money,

822
00:37:45,560 --> 00:37:49,359
Speaker 2: but but the plenty of assets to rely on can

823
00:37:49,440 --> 00:37:52,360
Speaker 2: mask the fact that the that there are holes underneath

824
00:37:52,400 --> 00:37:54,560
Speaker 2: the surface that we can't see. So if you've kind

825
00:37:54,560 --> 00:37:57,040
Speaker 2: of combined your finances, but you have two different, very

826
00:37:57,080 --> 00:38:00,560
Speaker 2: different financial lifestyles, that's gonna go that's gonna surf eventually

827
00:38:00,640 --> 00:38:02,319
Speaker 2: be a real problem I'm sure you've seen this too, Bob.

828
00:38:02,960 --> 00:38:05,160
Speaker 1: Yeah, I'm dealing with the situation right now where this

829
00:38:05,280 --> 00:38:09,319
Speaker 1: couple has pretty much been separated for seven to eight

830
00:38:09,440 --> 00:38:14,359
Speaker 1: years and they're just now getting around to actually finalizing

831
00:38:14,400 --> 00:38:14,920
Speaker 1: a divorce.

832
00:38:14,960 --> 00:38:16,480
Speaker 3: And it's everything you just talked about.

833
00:38:16,560 --> 00:38:19,719
Speaker 1: You know, they want to keep the kids stable, there's

834
00:38:19,760 --> 00:38:23,040
Speaker 1: affordability issues with keeping the house, a lot of things

835
00:38:23,120 --> 00:38:28,000
Speaker 1: that where money issues have just caused this relationship not

836
00:38:28,120 --> 00:38:31,439
Speaker 1: to end, probably when it should have. And that comes

837
00:38:31,480 --> 00:38:34,160
Speaker 1: by I guess this comes back to the major point,

838
00:38:34,440 --> 00:38:37,359
Speaker 1: you know, aligning your values, you know when it comes

839
00:38:37,400 --> 00:38:39,960
Speaker 1: to money is a key part of your marriage.

840
00:38:40,000 --> 00:38:41,000
Speaker 3: And the sooner you can do.

841
00:38:41,000 --> 00:38:43,200
Speaker 1: That, the better. Here's the all Worth advice is, if

842
00:38:43,239 --> 00:38:46,880
Speaker 1: money is keeping you together, make sure it's also bringing

843
00:38:46,920 --> 00:38:47,640
Speaker 1: you closer.

844
00:38:47,960 --> 00:38:48,760
Speaker 3: Thanks for listening.

845
00:38:48,760 --> 00:38:50,960
Speaker 1: You've been listening to Simply Money, presented by all Worth

846
00:38:50,960 --> 00:38:53,880
Speaker 1: Financial on fifty five k R see the talk station